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8/18/15
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New Standard Equities (NSE) has acquired Rancho Azul, a 74-unit multifamily project in Spring Valley, for $14 mil ($189k/unit) in a venture with Hanover Financial. The asset, formerly known as El Paseo, was sold by Fowler Property Acquisitions.
Rancho Azul is situated on almost four acres at 10130 Austin Dr, east of Hwy 125 and south of Hwy 94 in an unincorporated area of East San Diego County. The two-story, garden-style property consists of 16 one-bedroom/one-bath units, 44 two-bedroom/one-bath units and 14 three-bedroom/one-and-a-half-bath apartment homes.
Planned interior renovations are expected to take two years and cost around $1 mil. They will include installation of washers and dryers in units where practical, and the upgrading of kitchen appliances, countertops, cabinetry and flooring. Upgrades will also include drought tolerant landscaping and a new fitness center. The 76 existing carports will converted to garages. The property also offers 117 open parking spaces.
Hanover Financial provided the equity for the transaction, with Freddie Mac providing the financing arranged through Holliday Fenoglio Fowler. Kyle Pinkalla of Cushman & Wakefield represented both buyer and seller in the transaction.
According to Edward Ring, founder and CEO of Los Angeles-based NSE, the firm sees tremendous upside potential in the acquisition as a value-add asset in a market with a vacancy factor of less than 3%. In San Diego County, vacancy rates are the tightest among older, more affordable properties such as Rancho Azul, which was built in 1976.
The Rancho Azul property was NSE’s second acquisition in the San Diego market in the past year. In 2014, the company bought Asana at North Park, a 132-unit apartment community in the rapidly gentrifying North Park area of San Diego, for approximately $18.5 mil. The company is investing roughly $2.2 mil in renovating that project, with anticipated completion scheduled for the end of this year.
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